5 MUST USE stock investing tips to make trading easier (Especially if you’re a beginner)
Investing in stocks can be fun, but it comes with it’s challenges. You need time to research ideal companies and time to analyze ideal stock prices. When I started investing in the stock market, I thought I needed to have my screen showing the live chart during market hours everyday to become successful. Nope, not true! This article will explain the five stock investing tips that helped trading feel easy for me.
As a new investor, the first thing I wondered was:
“How am I supposed to watch the charts and keep track of my investments if I’m busy during market hours?”
Several other new investors, like myself, have the same issue. Since you’re reading this article, I assume you have that issue as well.
I know the drill. Right after buying your first stock, you spent the next few days reaching for your phone to see if the stock price had gone up or down and panicked at the thought of losing money. Maybe you even sold a few too early.
If you want to stop panicking and wasting hours everyday, keep reading for these 5 simple stock investing tips that’ll make things much easier AND save you a ton of time:
- Start SMALL
I cannot stress this enough! This is the best beginner stock investing tip I can give. While you’re learning the basics of stock investing, it’s better to risk losing $20 vs. $2,000 and spending the rest of your life fearing stocks.
It’s a lot to learn, so make sure you’re not pressuring yourself to manage an account with thousands of dollars.
Here’s exactly HOW to start small. You have two options:
- First — Buy one share of a company you are interested in.
But what if the company you are interested in has a stock price of $2,000? Then you’d go with the second option.
- Second — Look into fractional shares.
Wait, don’t fret! This doesn’t involve doing any math. Fractional shares are only a part of a stock.
Let’s say you’re interested in purchasing stock in Company ABC and the current price of one share is $2,000. In this example, as a newbie you’re thinking you should take my advice of starting small and only investing $20. Great idea! But how can you invest in Company ABC with $20 when the stock price is $2,000? Purchasing fractional shares means that instead of purchasing one full stock of Company ABC, you can buy a fraction of a stock for a lower amount. That probably made you sigh in relief like I did when I first learned this. You’d feel a lot better and a lot less pressure if you were learning to trade stocks with $20 vs. $2,000, trust me.
Now you need to know how you can go about that.
There aren’t many trading platforms that allow fractional shares, so you’ll need to search for platforms that offer this and that best fit your investment needs. Fidelity Investments is a great example of a platform that currently offers the ability to buy fractional shares. Robinhood does as well. There are several other platforms that offer this type of investing. Regardless of the platform, EVERY newbie investor should consider this stock investing tip!
2. Follow the news for stocks you’re interested in:
I know this sounds simple but it’s highly effective! One of the key drivers to stock price changes is public information aka news/press. If you want to focus on one or a few companies in the beginning, the second best thing you can do is to follow the press! There are several ways you can go about this:
- 1st — The easiest way, my favorite, would be to set google alerts. Google does a great job finding daily articles about the key words (or Company names) that you provide.
- 2nd — Yahoo finance is one of the best websites for financial news. Search for the company you’re interested in and take a look at the news section.
- 3rd — There are several other investment apps that provide press articles such as Robinhood that allow you to “follow” companies and view its top daily news items.
There are so many more! Check out if the investment platform you’re using has a news section. If so, make sure to keep up with the press for your favorite companies because it’ll help you understand the stock price movements.
3. Set price alerts (This stock investing tip is one of my absolute favorites for beginners!)
A price alert is simply setting a notification for when the stock reaches a certain price. This is the tip that will save you the most time.
- If you’re looking to buy a share of Company ABC but you want to wait and see if the price will fall to $1,900, you can set a price alert for $1,900 instead of stalking the charts all day waiting to see if the candle will dip.
- If you’re holding a share of Company ABC that you purchased at $2,000 but would like to know if/when the price reaches $2,600, then you can set a price alert for $2,600.
Simple.
Price alerts are simply notifications and do not affect your actual investments. It’s something ALL investors should have so that you can avoid the urge to spend loads of time stalking the stock price.
For this tip, you can set price alerts within Yahoo Finance, Fox News, and most times the trading platform that you’re investing on.
As a stock investor, especially a beginner, you should absolutely have price alerts!
4. Set Buy Limit Orders
Sounds fancy and complicated, but it’s not.
It’s actually a really cool feature that most trading platforms have. A buy limit order is a fancy way of saying: “Hey, when the price of Company ABC’s stock drops to $1,800 or below, I would like to buy X number of shares”.
That’s it. It’s that simple.
When you set a buy limit order, the platform will buy the stock for you if the price reaches the limit you set.
This is THE BEST option for:
- If you have an idea of the price you would feel most comfortable purchasing the stock at and,
- If you’re super busy and don’t have time to enter a trade the second you receive a price alert.
A lot of people get intimidated when they see this option but it’s actually great for beginners like yourself. Plus, even if you had the time to sit and watch the charts all day, it takes a load of pressure off if you know you’ve set the order in place for your preferred price. (Even day traders use this strategy!)
5. Set Sell Limit Orders
Also sounds fancy and complicated, also not.
This works the opposite of a buy limit order. Let’s say a few months ago you purchased a share of Company ABC for $2,000 and would feel uncomfortable with the price dropping below $1,800”. In this scenario, you would set a sell limit order that says: “Hey, when the price of Company ABC’s stock drops to $1,800 or below, I would like to sell X number of shares”.
This has all the same stress relieving and time saving benefits as a buy limit order. Successful traders do not need to have their eyes glued to a screen watching the stock price all day long. Use these savvy yet super easy stock investing tips to make things easier and save time.
Stock investing can and should be a fun and easy thing to learn. Feeling anxious to keep up with prices everyday is something that will ruin the fun very fast. Try out a few of these few stock investing tips so that you can relax and enjoy the learning process as I am now.
